As lawmakers in Washington delay authorizing additional public debt, investors are treating the prospect of a U.S. government default -- while still highly unlikely -- as growing in probability.
Even as traditional market indicators suggest the government's debt is as secure as ever, bets that the Treasury will default are becoming more popular. And foreign investors seem to be displaying skittishness about their holdings of Treasury debt. With Congress showing little progress on a deal to raise the debt ceiling, some economists say the possibility of a default by the Treasury, once unimaginable, has now become a factor in investment decisions.
Even as traditional market indicators suggest the government's debt is as secure as ever, bets that the Treasury will default are becoming more popular. And foreign investors seem to be displaying skittishness about their holdings of Treasury debt. With Congress showing little progress on a deal to raise the debt ceiling, some economists say the possibility of a default by the Treasury, once unimaginable, has now become a factor in investment decisions.
